In the letter, Polygon's board is asking for changes to Article 30 of the EU's data law, which the board says could stifle blockchain development in its current format.
The company behind Polygon, a multi-chain Proof-of-Stake blockchain platform around its ERC-20 MATIC token, has sent an open letter to representatives of the European Parliament regarding Article 30 of the law European on data.
Unintended consequences of EU policy
Europe's data law, whose primary goal is to break up the monopolies companies tend to have over their users' data, may have unintended consequences for blockchain developers, the letter says.
In its current form, EU data law does not explicitly target blockchain development. In fact, the primary targets of said legislation are businesses that benefit from a treasure trove of data generated by the Internet of Things (IoT) that, for the most part, is rendered unavailable to parties with a legitimate interest that could help improve the quality of life of EU citizens through research and development fueled by this currently inaccessible data.
However, Section 30 of the law proposes changes to blockchain smart contracts that, if enacted, could place decentralized platforms in a legally questionable status.
Legislation could put decentralization at risk
Currently, the wording of Article 30 makes liable whoever offers smart contracts under a data provision agreement”. According to Polygon representatives, the current wording could make developers of decentralized platforms liable for the misuse of smart contracts.
“Polygon Labs is interested in this issue as we seek to ensure the responsible growth and development of permissionless blockchain-based systems on a global scale. We respectfully request that you consider the proposed revisions to s. 30 […] to ensure that this new law does not inadvertently capture open, transparent, and permissionless parts of the emerging blockchain technology.
While a developer is, understandably, at fault if the smart contract built on its framework malfunctions, Polygon is concerned that the current wording could make developers liable for wrongdoing by a third party who might use a properly functioning smart contract for less than ideal purposes.
Additionally, a second section of the legislation requires developers creating smart contracts to implement a kill switch that could prevent problems from occurring. While this sounds great in theory, it would be nearly impossible to implement in a truly decentralized setting – not to mention that it could prove an easily targetable point of failure for bad actors.
In order to circumvent any potential issues, Polygon is asking that the wording be changed before the Data Law comes into force and that the laws already passed within the framework of the European crypto-asset markets be followed for the time being.